Rating Action: [h=1]Moody's downgrades Sprint's CFR to B1 with negative outlook[/h]
Global Credit Research - 17 Dec 2014
[h=4][/h]New York, December 17, 2014 -- Moody's Investors Service ("Moody's") downgraded several ratings of Sprint Corporation ("Sprint" or "the company") including the company's Corporate Family Rating ("CFR") to B1 from Ba3, the company's Probability of Default Rating ("PDR") to B1-PD from Ba3-PD, Sprint's senior unsecured rating to B2 from B1 and lowered the company's Speculative Grade Liquidity Rating to SGL-3 from SGL-1. Moody's also assigned a Ba1 rating to Sprint's existing $3.3 billion revolving credit facility. Today's rating action reflects our expectation that intense competitive challenges and Sprint's limited ability to respond effectively will lead to a sustained period of very weak earnings and cash flow. Consequently, leverage is likely to increase, which when coupled with negative pressure on cash flow from installment billing plans and its phone leasing option, is expected to lead to a steady deterioration in Sprint's liquidity position. Sprint's rating outlook is negative reflecting what we believe to be limited ability to reverse current trends in the foreseeable future.
Moody's has taken the following rating actions:
.Issuer: Sprint Corporation
..Corporate Family Rating -- B1, from Ba3
..Probability of Default Rating -- B1-PD, from Ba3-PD
..Speculative Grade Liquidity Rating -- SGL-3, from SGL-1
..Outlook -- Negative, from Stable
..Senior Unsecured Notes -- B2, LGD5 from B1, LGD5
.Issuer: Sprint Communications, Inc.
..Outlook -- Negative, from Stable
..Senior Unsecured Notes -- B2, LGD5 from B1, LGD5
..Junior Guaranteed Unsecured Notes -- affirmed at Ba2, LGD2 from LGD3
..Senior Unsecured Gtd. Bank Credit Facility -- Assigned Ba1, LGD2
.Issuer: Sprint Capital Corp.
..Outlook -- Negative, from Stable
..Senior Unsecured Notes -- B2, LGD5 from B1, LGD5
..Senior Unsecured MTN Program -- (P)B2 from (P)B1
.Issuer: Clearwire Communications LLC
..Outlook -- Negative, from Stable
..Senior Secured 1st Lien Notes -- Ba1, LGD1 from Baa3, LGD1
..Exchangeable Notes due 2040 -- Ba2, LGD2 from Ba1, LGD2